Standard deviation of the damage, Econometrics

Assignment Help:

In a year, weather can impose storm damage to a home. From year to year the damage is random. Let Y be the dollar value of damage in a given year. Assume that 95% of the year's Y=$1,000, and 5% of the years, Y=$15,000.

a. Calculate the mean and standard deviation of the damage in any year.

b. Consider an 'insurance pool' of 100 sufficiently dispersed homes, which implies the damage to dissimilar homes can be viewed as separately distributed as random variables. If ? is the average damage to those 100 homes in a year, (i) what is the expected value of the average damage? (ii) What is the probability that ? exceeds $2000?

 


Related Discussions:- Standard deviation of the damage

Explain the term volatility clustering, Problem: (a) Write down the equ...

Problem: (a) Write down the equation for symmetric GARCH and clearly explain its components. (b) Explain the term ‘volatility clustering'. (c) How would you model leverag

.the matrix of technical coefficients., I could not understand the matrix o...

I could not understand the matrix of technical coefficents

Course work, estimate the determinants of demand of a firm or several firms...

estimate the determinants of demand of a firm or several firms within a particular industry or country

Production function and general equilibrium, Production Functions, Labor Ma...

Production Functions, Labor Markets, and a Small Open Economy. In 2007, the Icelandic economy was in general equilibrium, the supply of labor was a positive function of the real

Homoscedasticity and heteroscedasticity, Probelm: (a) Differentiate bet...

Probelm: (a) Differentiate between homoscedasticity and heteroscedasticity. (b) Outline the reasons why the variances of disturbance term may vary. (c) Given the 3 observ

Request of answers, Ask q2. Using a sample of 545 full-time workers, a rese...

Ask q2. Using a sample of 545 full-time workers, a researcher is interested in the question as to whether women are systematically underpaid compared with men. First, a research es

Total product-average product and marginal product, Consider the following ...

Consider the following short run production function. Q 0 15 35 60 90 115 135 150 16

Surpluses at the equilibrium position, The inverse demand and supply functi...

The inverse demand and supply functions for a product are given as:  where P  is  price, Q  is  quantity  and  the  subscripts  d  and  show demand and supply, respectiv

Human Resources Management, Effective Human Resources Management Depends Up...

Effective Human Resources Management Depends Upon Sound Reward System Essays and Term Papers

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd